CHICAGO, Jan 4 (Reuters) - Lean hog futures soared by their daily trading limit at the Chicago Mercantile Exchange on Thursday as the market recovered after setting contract lows during the two previous sessions.

Technical buying and short covering helped lift futures, though hog supplies remain ample, analysts said.

Wholesale prices also rose, with the pork carcass cutout up $1.72 from Wednesday at $84.50 per cwt, the U.S. Department of Agriculture said.

"Heavier weights, plentiful hog supplies, overall big production remain an ongoing feature, yet pork product markets have mostly held their own this past month plus," broker StoneX said in a note.

Most-active February lean hog futures finished up 3.75 cents at 69.050 cents per pound, after touching a contract low of 64.575 cents on Wednesday. The contract is down about 8% since November.

On Friday, CME will temporarily expand the daily trading limit to 5.5 cents.

Demand for hogs for slaughtering has increased, with the USDA estimating meatpackers processed 491,000 pigs on Thursday. That was up from 490,000 hogs a week ago and 486,000 hogs a year ago.

Packers had profit margins of $68.90 per hog, up from $65.85 a week ago, according to

Margins deteriorated for beef processors. They were losing $132.30 per head of cattle, compared to profits of $26.80 a week ago, said.

CME February live cattle futures ended down 0.725 cent at 171.125 cents per pound, while March feeder cattle stumbled 1.375 cents to 225.650 cents per pound.

The USDA reported the choice boxed beef cutout at $275.90 per cwt, down $2.13.

Livestock traders and producers are monitoring forecasts for a winter storm across the central U.S. next week.

"The exact track of the storm will determine which areas pick up several inches to perhaps a foot of snow," said Brandon Buckingham, AccuWeather meteorologist.

"How quickly the storm strengthens will determine how fast strong winds ramp up over portions of the Plains and the Upper Midwest. Blizzard conditions may develop should the storm evolve to its full potential." (Reporting by Tom Polansek in Chicago; Editing by Sriraj Kalluvila)